Carl Icahn to Tim Cook: Apple is worth more than a trillion bucks.
In a long-winded open letter published this morning, the rabble-rouser investor called on Apple’s CEO to repurchase more company stock to reward investors for investing in a company that Icahn believes continues to be undervalued.
“With Apple’s shares trading for just $128.77 per share versus our valuation of $240 per share, now is the time for a much larger buyback,” Icahn wrote.
“We again simply ask you to help us convince the board of how these two underlying issues (inefficient net cash growth and share undervaluation) persist and combine to enhance the opportunity for accelerated share repurchases in greater magnitude,” he added.
Share buybacks increase the value of each unit of stock by reducing the amount of stock in circulation and available to investors. Apple’s board recently increased its share purchase authorization from $90 billion to $140 billion, but it’s apparently not enough for Icahn. The investor is still unhappy with the amount of cash Apple is sitting on, and believes the company’s new products and services like the Apple Watch and Apple Pay, coupled with the potential for expansion into new categories like cars and TVs, make Apple severely undervalued.
“Combined, these two new markets represent $2.2 trillion, three times the size of Apple’s existing markets (if we exclude Apple Watch),” the letter said.
Here’s the full letter:
This article originally appeared on Recode.net.